Major cyber-attack as costly as Hurricane Sandy: Lloyd’s

Lloyd's of London warned that a serious cyber-attack could cost the global economy as much as $53 billion. | © AFP |

Paris (AFP) | 17 July 2017 12:24

The world’s oldest insurance market and Cyence consultancy said the threat posed by hacking attacks has surged and the global economy will be increasingly vulnerable to cyber-attacks over the next decade.

The report warned that the danger is also pushing up the cost of insurance for companies.

There was a growing threat that a cloud service provider could be hacked, which could cause losses of $53 billion (46.2 billion euros), it said.

That figure is the average estimate but the report said that given the uncertainty in calculating cyber losses, they could be as high as $121.4 billion or as low as $15.6 billion, depending on which organisations were involved and how long the cloud service disruption lasted.

The report likened the cost of a major cyber-attack to Hurricane Sandy, the second most costly storm in history, which caused damage of between $50 billion and $70 billion to the northeastern United States five years ago.

After a “cloud” attack, the second most likely threat stemmed from attacks on computer operating systems of the type run by a large number of businesses around the world, known as a “mass software vulnerability scenario”, which could cause losses of up to $28.7 billion.

Lloyd’s warned that most losses from cyber-attacks were not insured, leaving governments and businesses highly vulnerable if they were to occur.

The uninsured shortfall could be as high as $45 billion for the cloud services scenario, and $26 billion in the event of a “mass software vulnerability scenario”.

Inga Beale, Lloyd’s chief executive, said: “Just like some of the worst natural catastrophes, cyber events can cause a severe impact on businesses and economies, trigger multiple claims and dramatically increase insurers’ claims costs.”

In June, a global wave of cyber-attacks that began in Russia and Ukraine and spread to western Europe and across the Atlantic wrought havoc on government and corporate computer systems.

Several multinational companies were targeted, including US pharmaceutical giant Merck, Russian state oil giant Rosneft, British advertising giant WPP and French industrial group Saint-Gobain.

© 2017 AFP

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